MANAGEMENT

Detailed explanation-1: -The law of large numbers states that as the number of policyholders increases, the more confident the insurance company is its prediction will prove true.

Detailed explanation-2: -The law of large numbers allows an insurance company to predict the expected losses of a group. The basic principle of this law is that the larger the number of separate risks of a like nature combined into one group, the more predictable the number of future losses of that group within a given time period.

Detailed explanation-3: -Concurrent insurance is when two insurance policies are held to cover the same risks over the same time period.

Detailed explanation-4: -The principle of probability: the loss in the shape of premium can be distributed only on the base of theory of probability. The chance of loss is estimated in advance to affix the amount of premium.

Detailed explanation-5: -The essence of insurance is the principle of indemnity that the person who suffers a financial loss is placed in the same financial position after the loss as before the loss occurred. He neither profits nor is disadvantaged by the loss.